Forecast: eurozone recession to end in spring
The national statistics offices of France, Germany and Italy on Tuesday (3 April) jointly forecast that the eurozone recession will end in spring, with meagre growth projected in the summer.
The institutes said the eurozone contracted by 0.2 percent of GDP in the first three months of this year after a 0.3 percent recession in the last quarter of 2011. In the coming three months, the eurozone is expected to have zero growth, followed by feeble growth of 0.1 percent in the summer, as exports accelerate.
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Celebration time? National forecasters say recession is soon to end (Photo: Chris Chapman)
"Fiscal consolidation and deteriorating labour market conditions will weigh on household consumption," the institutes warned.
"Activity will gain slowly, but growth will stay weak," they said, noting that with more confidence having returned to the financial sector, it should be easier to take up loans. "But investment is likely to remain sluggish," they added.
"Finally, oil prices have increased since the start of 2012, thanks to geopolitical troubles, and further increases cannot be excluded."
Meanwhile, Italy's austerity measures introduced by the highly praised technocrat Prime Minister Mario Monti are starting to have an effect.
The country's gross domestic product contracted by one percent in the first quarter compared to the last three months of 2011, according to an estimate from the Confindustria business lobby.
"With austerity, one doesn't grow," industry minister Corrado Passera said Tuesday in Rome.
Outside the eurozone, Britain's economy has started to grow again and avoided a 'double-dip recession', the country's chambers of commerce said Tuesday.
Growth is predicted at 0.3 percent in the first three months of 2012, after a contraction of 0.3 percent in the last quarter of 2011. A double-dip means two successive quarters of recession.
